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Corporate Responsibility: Consequences For Taking A Stand
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Corporate Responsibility: Consequences For Taking A Stand - Executive Leadership Articles

Corporate Responsibility: Consequences For Taking A Stand

Executive Leadership Articles

Corporate Responsibility: Consequences For Taking A Stand

Depending on whom you ask, Dick’s Sporting Goods will either see a very small drop in sales because of its recent efforts in social responsibility, or it has doomed itself to certain death for its attack on Constitutional freedoms.

As we shared a few weeks ago, the national sporting good chain, which also owns a smaller chain of Field & Stream stores, announced it would sell firearms only to customers aged 21 and older, and it would no longer sell semi-automatic sport rifles, in response to a school shooting in Florida. Other national chains such as Walmart and Kroger either already had these policies in place, or made similar adjustments to store policy at around the same time. Additionally, Dick’s has reportedly hired lobbyists to push for action toward legislation it hopes will decrease the chances of shootings such as have been in the news with increased frequency.

The pushback--especially on the lobbying--has been considerable. Some gun manufacturers stopped supplying their product to Dick’s, encouraging shoppers instead to visit “one of the thousands of pro-Second Amendment firearms retailers.” The National Shooting Sports Federation, a trade organization, unanimously voted to eject Dick’s from its membership for “conduct detrimental to the best interests of the Foundation.” Additionally, many gun owners have called for boycotts on the national chain.

In The Washington Times, cited often as a conservative newspaper, one opinion writer says, “Look for Dick’s, come Christmas time, to go the way of Sears--meaning, closures are on the horizon. The American people, loud and clear, have spoken.”

Yet analysts at The Motley Fool point out that Dick’s had already not been selling assault weapons in its 716 stores, stocking them only in its 35 Field & Stream stores. Strictly from a sales perspective, the loss would only be a small percentage in a small percentage of the chain’s overall presence. Whether the company’s recent actions will drive customers away, it says, “will depend on whether gun owners were really the customers driving sales in other departments,” adding that boycotts have little impact on a company’s bottom line. While some shoppers may stay away in order to make a statement, others may be inspired to come in, making the opposite statement, “but ultimately consumers are unlikely to change their buying patterns.”

Meanwhile, judging on stock value alone, CVS has seen its stock prices remain mostly steady over the past couple of years, after its decisions not to sell cigarettes and to fill only very short-term prescriptions for opiates, and the chain remains the nation's largest pharmacy, based on number of stores. CVS has the advantage of not being involved in something as politically polarizing as gun sales, but cigarettes are a buy-and-keep-buying product bringing people into stores on a regular basis.

It seems a bit early to predict (reliably) whether the consequences for Dick’s Sporting Goods will be positive or negative, but even if the national chain sees a closing of stores or a meaningful drop in sales, if the company’s leadership feels better about its product, its place in the community, and its standing up for policy, there’s surely some worthwhile tradeoff none of us is qualified to define. Only Dick’s executives can make this determination, and it will be fascinating to see what it has to say in the coming days.

Reference links:
Washington Times: https://www.washingtontimes.com/news/2018/may/11/dicks-sporting-feeling-bottom-line-pinch-pc-gun-co
NSSF: https://www.nssf.org/nssf-statement-dicks-sporting-goods-announcement
The Motley Food: https://www.fool.com/investing/2018/05/16/will-dicks-sporting-goods-be-hurt-by-a-gun-owners.aspx

 

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Corporate Responsibility: Consequences For Taking A Stand - Executive Leadership Articles

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